I move:
That a sum not exceeding £2,643,010 be granted to complete the sum necessary to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1962, for the Salaries and Expenses of the Office of the Minister for Transport and Power, including certain Services administered by that Office, and for payment of a Grant-in-Aid.
The Estimate of £3,964,510 for 1961-62 shows a net increase of £317,840 compared with £3,646,670 granted in 1960-61.
The principal increases in 1961-62 are in the provisions for Salaries, £28,000 (Subhead A); C.I.E.—Redundancy Compensation £116,000 (Subhead D.2); Harbours £119,000 (Subhead E); Construction, Dublin Airport £20,000 (Subhead F.3); Shannon Free Airport Development Co. £80,000 (Subhead G.4); International Organisations £21,000 (Subhead J) and Rural Electrification £71,000 (Subhead L). Increases on other subheads amount to £40,000, bringing the total of increases to £496,000.
The principal decreases in 1961-62 are in the provisions for Acquisition of Land £22,000 (Subhead F.1); Construction—Shannon Airport £52,000 (Subhead F.2) and Technical Assistance £10,000 (Subhead K). Decreases on other subheads amount to £2,700. To these must be added an increase of £92,000 in the Appropriations-in-Aid subhead which is equivalent to a decrease in the net grant. This brings the total of decreases to £178,000.
The net increase in the Estimate for 1961-62 compared with 1960-61 is therefore £317,840 as I have already stated. The increase in the salary provision is mainly due to increases in the number of technical officers employed in air traffic control and on radio work, and to provision for the staff of Cork Airport. The increase in C.I.E. redundancy compensation is caused by a greater degree of reorganisation within C.I.E. than was envisaged originally. The increase in harbour grants is due to the fact that the bulk of the grants payable on the construction of two new tenders for Cobh will fall due in the current year and also to provision for a major improvement scheme for Galway harbour.
The increase for construction at Dublin airport arises from the need for additional passenger handling facilities consequent on the phenomenal growth of traffic at that airport. The increase in the grant-in-aid to Shannon Free Airport Development Company arises from an increase expected in the amount of grants which will be paid to industrialists establishing new factories at Shannon airport. The increase in the amount for International Organisations is mainly due to increased contributions for weather ships and air navigation aids operated on an international basis. The contributions are proportionate to our share of transatlantic air traffic and the inauguration of an Irish transatlantic service has increased our proportion of the cost.
The decreases in the provisions for Acquisition of Land and Construction at Shannon Airport are due to the completion of the acquisition of land required for airport construction and improvement and to the virtual completion of the new runway and terminal buildings at Shannon airport. The reduction in the provision for technical assistance arises from a reduction in the amount for a major project which it is expected will be completed this year. This project is financed from the American Counterpart Fund and a corresponding reduction is shown in the Appropriations-in-Aid.
A substantial increase is provided for in the Appropriations-in-Aid from landing fees at Shannon airport, due to an expected increase in the number of landings. The balance of the increase is due to an increase in the cash surplus on the operation of Dublin airport.
Before reviewing operations during the past year and dealing with plans for the future I wish to draw the attention of Deputies to the notes on the functions and activities of my Department circulated in advance of this debate. Many duties are performed, which are non-controversial and consequently are seldom the subject of public discussion. Nevertheless, these functions are valuable to the community and although not generally known represent a very considerable proportion of the work performed by the Department.
The House had only very recently an extended debate on the report and accounts of C.I.E. for the year ended 31/3/60. In the particular circumstances it was perhaps unavoidable that a disproportionately large part of the debate was devoted to the question of the closing of branch lines but I did review for the Dáil the substantial progress made by C.I.E. towards the target of self-sufficiency by 31/3/64 set before the Board by the Transport Act, 1958.
Preliminary figures for the year, which are subject to further check and audit, indicate that the loss of £709,000 in 1959/60 has been reduced to £250,000 in 1960/61. In 1957/58 the losses were £2.3 million. This reduction is due mainly to further substantial increases in business during the year, total receipts having been increased by £1 m. approximately and railway receipts alone by £500,000. There is now some reasonable prospect that the Board will have reached solvency before 31/3/64.
The rapid progress of the Board towards solvency will release part of the present annual fixed grant from the wasteful and unremunerative function of meeting revenue losses and thus enable the Board to devote more funds to the positive goals of improving services and efficiency so as to develop the long term earning capacity of the undertaking.
Making use of its freedom of commercial action, new business is steadily and continuously being secured and this is the most effective test of the standard of service offered by the Board. A heartening feature of the Board's financial recovery is the fact that the railway carried more tonnage during the year ended 31st March, 1961, than ever in the Board's history, highlighting the Board's determination to make the railways pay.
Revenue from package deals and special deals for carriage of livestock continues to increase, and the Board's targets were more than achieved. Up to February, 1961 package deals concluded by the Board brought in some £600,000 of new business. One of the more gratifying aspects of the package deal drive is the fact that C.I.E. are succeeding in convincing transport users that it is in their interests to employ professional transport hauliers rather than to purchase vehicles for their own use.
Much of the increased business is due to the Board's flexible and imaginative approach to the task of selling transport. I have mentioned the obvious example of the package deal but there were innovations on the passenger side also. About 92,000 passengers were carried on educational tours during the 1960 season, compared with 21,000 in the previous year. Another innovation, the rail rambler ticket, introduced in 1960, earned £8,600.
Mystery trains, successfully revived in 1959, carried 25,000 passengers in the 1960 season; traffic on day tours by coach and bus increased by 17,000 or 11 per cent. Bookings on the Board's extended coach tours increased from 7,800 in 1959 to 9,100 in 1960. Bookings for the current year so far are appreciably better than last year. A particularly satisfactory feature of the extended coach tours was the increase of 100 per cent in bookings for the month of October, 1960. The fact that the weather during the 1960 summer was by no means dry indicates that even better results would have been achieved if fine weather had prevailed.
Season ticket users of C.I.E. provincial bus services are now paying less for their weekly tickets as a result of the new system of charging which came into effect in December, 1960. The Board then decided to bring bus charges more closely in line with corresponding rail fares. Juveniles' and school children's tickets are now almost 50 per cent. cheaper than heretofore. The age limit for school children has been raised from 15 to 16 years and rates have been reduced to as low as one-third the adult rate. A new age category has also been introduced for students and apprentices. From 16 to 18 years old the rates have been cut from three-quarters to half adult fare, and from the 19 to 21 age group the cost is now two-thirds instead of three-quarters the adult charge.
Enough has already been said about the closure of uneconomic branch lines. I will confine myself to repeating that the Board do not plan to close any further branch lines during the statutory reorganisation period. In the Board's experience the substitute road services are giving satisfaction to its customers. Complaints have been few and the Board have taken steps to ensure as far as it can in each case that the cause for complaint will not recur.
The Board have set ambitious but practicable targets for the improvement of services. Long term plans include a major review of rolling stock, plant, equipment and buildings over the entire system; plans are being prepared to bring these up to the highest international standards. In the case of rail services, all main line trains will be brought up to the standard of named trains; carriages will be modernised and new, up-to-date carriages will be introduced; station facilities will also be improved. The Board's target on the locomotion side is full dieselisation as early as possible. As far as rail freight is concerned there is a continuous drive to improve handling facilities and new, up-to-date equipment is being provided.
The Board's road services also are to be improved. Better standards of heating and comfort are being provided for bus passengers. The question of additional bus shelters is being examined. Twenty-five per cent. of the single deck fleet will be renewed over the next two years. Old and obsolete vehicles in the road freight fleet are being replaced.
C.I.E. have undertaken a major review and reorganisation of the management structure at all levels and have set an example to industrialists by the internal use of work study in all its forms and cover a great area of administration and operation. Area and district managers have been appointed with delegated authority to act with speed and flexibility in selling and rendering service to the public, and also in dealing with any complaints about local services. The Board confidently expect that the new organisation will add further vigour to the drive for better services to the customer and more business for the Board.
A sum of £35,000 has been allocated from the U.S. grant Counterpart Reserve Fund towards the cost of the establishment by C.I.E. of a development and research unit in connection with special technical freight transport problems including the use of containers, flats and pallets to form the basis of better road/rail co-ordination.
A sum of £9,800 has already been paid to C.I.E. for the purchase of elevators, portable conveyors and pallet trucks in pursuance of this research and development and it is expected that the balance of the grant will be required over the coming year.
As far as the Board's employees are concerned, intensive training schemes to improve techniques at all levels have been launched and the scheme of joint consultation has facilitated full co-operation between employees and management.
One last word of warning about C.I.E. No Minister for Finance faced with tremendous demands for seven figure increases in educational and social services will want to subsidise C.I.E. It will take the same kind of continuous dedicated effort by management and staff working closely and enthusiastically together to maintain C.I.E. as solvent a company as can for instance be found in a modern highly developed export industry facing cut throat competition. Let everyone dispel the idea that there will ever be an easy period for C.I.E. when either to management or staff the prospects appear easy and cash returns are rolling in without tremendous effort.
The number of coach tours operated by foreign operators continues to increase. The number of passengers carried on such tours in 1960 was about 13,600 compared with 7,500 in 1959. These tours are now admitted freely; the only conditions which are applied are (1) that they must be confined to persons normally resident outside the State who have made advance reservations and (2) that the duration of each tour within the State must be not less than 4 days. It is noteworthy that notwithstanding the substantial numbers of passengers carried on such tours the numbers carried by C.I.E. on its own coach tours have also increased substantially.
I am happy to be able to report some significant improvements in the cross-Channel passenger services. I must take this opportunity to acknowledge the quick response made by Sir Reginald Wilson, the new Midland Chairman, to the representations made to him.
An additional platform is at present being constructed at Holyhead. This will greatly facilitate passenger movements by the more expeditious handling of extra and relief trains, many of which, up to the present, have had to remain outside the station pending the clearance of other trains and this will also speed up clearance of ships. The customs examination centre at Holyhead has been extended to permit of a faster flow of passengers through customs.
British Railways have reduced the maximum number of passengers to be carried on the larger mail boats. Accommodation is usually fully booked at peak periods only but as additional sailings are being provided for these periods there will be no overall loss in carrying capacity. Additional sailings will as usual be provided during the summer season but as compared with 1960 there will be ten extra sailings, viz. seven inwards and three outwards. These include certain completely new sailings with special train connections.
Heretofore on sailings inwards for which sailing tickets were required control was exercised at Holyhead and passengers without sailing tickets were held up there. British Railways now propose to exercise this control when passengers are joining the connecting train for Holyhead and persons without sailing tickets will not be allowed to join the train. This will prevent outshipments at Holyhead. The foregoing improvements should go a long way towards eliminating complaints about uncomfortable travelling arrangements. Having acknowledged the improvements already effected and promised this summer, I should say that we await further improvement. Better refreshment service, more personal care for passengers, greater punctuality of trains, alterations to ships sailing and the replacement of the Princess Maud are some of the matters still for consideration.
At Dún Laoghaire, the route which after Dover-Calais is the busiest sea route from Britain, improvement works were carried out by the Board of Works at a cost of some £140,000. The boat pier has now been provided with a modern double-deck structure with improved facilities for passengers, more customs examination space, a track for passengers' cars and arrangements for crane installations so that the carriage of increased numbers of vehicles could be effected speedily.
British Railways are providing for the summer season on the Dún Laoghaire-Holyhead service additional capacity for 428 cars inwards and 464 cars outwards and on the Rosslare-Fishguard services additional capacity for 1,000 cars each way. This additional capacity, together with that to be provided for 2,000 cars each way by the British and Irish Steampacket Co., will mean an increase in capacity by 50 per cent. over the summer period this year as compared with last year. I hope that the response to this increase in capacity will go far towards establishing the need for and the profitability of placing a proper car ferry on a cross-Channel route. I do not need to stress the importance of this kind of tourism—it has been estimated that each tourist's car entering this country represents, on average, £60 tourist expenditure.
The Tribunal of Inquiry into cross-channel freight rates, which reported in May, 1959, suggested that a committee representative of shippers as a whole should be formed under official auspices to consider problems of cross-channel transport, particularly in connection with freight rates to co-ordinate information on these problems and to discuss them with the Irish and British Traffic Conference or with individual undertakings. In pursuance of this suggestion I had pleasure in launching the National Shippers Committee in May, 1960, with a widely representative membership. The Secretariat is provided for this Committee by the Federation of Irish Industries.
The Committee have been active in pursuing their objects since its inception. They had the unhappy experience of being presented in their first year of operation with an increase in cross-channel freight rates, which came into force in November, 1960. It was particularly disappointing to find that the method of introducing this increase differed nothing from that used prior to the formation of the National Shippers Committee. The Conference announced the increase less than one month from the date on which it was due to come into operation and no effort was made to discuss the proposal with the National Shippers Committee before the public announcement.
There is no statutory authority vested in me or in the Government to control international freight rates nor in the nature of the trade could such unilateral control be effectively exercised. Moreover, without access to the books and accounts of the companies on both sides of the Irish sea it would not be possible to determine whether any particular increase was justified or necessary. It does seem, however, in view of the importance of the trade to the country's economy and indeed if only as a matter of sensible public relations on the part of the companies, that they should discuss their proposals frankly with the National Shippers Committee, which represents the users, in order to explain the necessity for any increases and perhaps to modify or alter them in the light of the representations made by the Committee.
Apart from the activities on a broad front of the National Shippers Committee, Córas Tráchtála offer a very useful advisory service on shipping practice which is becoming more and more widely used by shippers and I'm told that in many cases their advice has meant savings in shipping freights and faster delivery. Many firms tend to let this important subject be handled as routine at lower levels and thus best and cheapest services may not be secured.
Under the aegis of Córas Tráchtála a number of importing and exporting services have established Shipping Services Ltd., as a co-operative organisation to handle customs clearance, forwarding and transhipment for Irish imports and exports through Liverpool. The participating firms have secured substantial decreases in the cost of these services and far greater efficiency in the handling and despatch of their business. I would strongly advise firms to whom these services are relevant and who may not yet have considered them to explore the possibilities.
A solution to the ban on container and ferry services to the port of Dublin has not yet been found. Negotiations between the parties concerned are being conducted under the aegis of the Labour Court and I can only hope that a satisfactory settlement may be reached. In the meantime Deputies will be glad to know that the ferry service between Greenore and Preston, which is operated privately and for which containers and road transport are provided at this side by C.I.E., is doing a substantial business. The possibility of ferry services at some other east cost ports has also been mooted.
There were no spectacular developments in the world shipping situation during the past year. The general slump in freight rates, which set-in in 1957 following the end of the Suez crisis, continued but some hopeful signs of better times ahead were noticeable. According to the tramp freight index of the British Chamber of Shipping the average monthly index rate of 74.2 points for 1960 showed a slight gain over that for 1959, compared with the lowest point of 62.7 points in April 1958; the market remained remarkably steady throughout the year and there was no tendency for freights to fall back. (These index figures relate to a base of 100 at 1952).
There is a good chance that there will be a slow intermittent recovery in freight rates at the end of a cyclical depression, the pattern of which has been repetitive in the industry. A significant factor is that the laid-up tonnage figure for the world which reached a peak of 9 million gross tons in 1959 had fallen to about 3 million gross tons by June, 1961, reflecting the fact that more ships are securing employment, combined with a continuing flow of old ships to the scrap yards. After noting the less favourable position in regard to tanker operation it is probable that the dry cargo market will reach a state of equilibrium before the tanker market, but the existence of laid-up tanker tonnage, some of which can be used for grain or other bulk cargo, tends to hold down dry cargo also.
It is gratifying to record, against this background, that Irish Shipping Ltd. kept all their vessels employed throughout the year and that in all the circumstances their trading results are likely to be satisfactory. Last year the company showed an operating surplus of £152,000 and a commercial loss of £543,000 after allowing for repairs costing £57,000 and full depreciation amounting to £695,000. For the year ending 30th April, 1961, Irish Shipping Ltd. expect an operating surplus, after allowing for the cost of repairs, but before charging depreciation, of about £238,000.
The company's fleet consists at present of fifteen dry cargo ships, of which ten are deep-sea, and three tankers, of which two are deep-sea. The aggregate dead-weight tonnage of this fleet is 148,000, of which 108,000 tons represent dry cargo tonnage. To replace three uneconomic vessels of a total dead-weight tonnage of approximately 26,400 tons, which were due for replacement and were sold during 1959-60, the company ordered two conventional deep-sea dry cargo vessels of 14,700 tons dead-weight each. One of these vessels was delivered in May, 1961, and the second vessel, which is being built in the Verolme Cork Dockyard, is due for delivery early in 1962.
The company have recently placed an order for a 15,000 ton bulk carrier with the Verolme United Shipyards, Rotterdam, as it is becoming clear that an efficient shipping company must be able to cater for the growing development of specialised bulk carriage for certain traffics, such as ore and even grain. These three vessels are of the most modern design and are expected to make a net profit plus depreciation even with present depressed freight rates.
I should perhaps define current shipbuilding policy as at present determined and agreed by the Board. The ideal time to build new ships is when new building and laid-up shipping are declining, when scrapping is necessary and when there is evidence that freight rates are on the upgrade. Even under the present conditions a number of vessels are earning profits and the company is not overburdened with out of date ships whose costs are out of line with present competitive conditions.
It is the practice of Irish Shipping Ltd., when ordering a new vessel, to seek competitive tenders from leading shipyards and the company have invariably invited tenders from any Irish yard which might be interested, including the Belfast yard of Harland and Wolff Ltd. It is expected that the Verolme Cork Dockyard will, with its modern layout and prefabrication techniques, be in a position to compete with the best foreign yards and that the vessel at present being built there for Irish Shipping Ltd. will herald a new era for Irish shipbuilding.
In their relatively short life so far of twenty years the company have succeeded in establishing a substantial fleet of modern ships, which, when the two ships on order are delivered, will amount to 138,000 tons dead-weight of dry cargo tonnage and nearly 40,000 tons of tanker tonnage. The present fleet represents a capital investment of the order of £13.7 millions, to which the State has contributed about £8.4 millions. That this investment has been a fruitful one is clear when we consider that (1) we have now a first-class fleet capable of diversified operation with vessels varying from the largest deep-sea freighters to small coasters—this fleet is one of the largest purely cargo fleets in these islands and we are now well on the way towards the target of 200,000 tons of dry-cargo tonnage which, it is estimated, would be sufficient to meet our essential needs in a future national emergency; (2) over the years Irish Shipping Ltd. have, by their earnings abroad, contributed substantially to our balance of payments; in 1960 the company's net contribution, on current account, amounted to £1,685,000; (3) the company have paid a total of about £2,750,000 income tax; (4) direct employment is given by the Company to about 800 men ashore and afloat; and (5) the repair, overhaul, bunkering and provisioning of the company's vessels are carried out in the State to the greatest extent practicable and the building of large vessels for the company at home has now commenced also. May I again comment on the fine reputation carried by the company throughout the world.
The provision of £240,000 for grants for harbour improvement works covers works in progress, or expected to commence shortly. The principal current improvement schemes are those for Drogheda and Galway, for which grants totalling £175,000 and £340,000, respectively, have been authorised and which it is expected will get under way during the year. This head also covers provision for the construction of two new passenger liner tenders, by Liffey Dockyard Ltd. to the order of the Cork Harbour Commissioners, of which the State is meeting half the cost.
The provision in 1959/60 was for a total expenditure on harbours of £120,648, but expenditure in the period reached only £105,000, because certain works, contrary to expectations, did not commence within the year. In addition to the grants for harbour improvement works from the Vote for Transport and Power, there is also provision in the Estimates for non-voted capital services, comprising a total of £83,000 for works at Dublin, Cork and Limerick, for which grants from the National Development Fund were approved. By now all of our commercial harbours have since 1945 either received a generous measure of State assistance towards essential improvement works or have applications under consideration.
I should make it quite clear that the grant of State assistance for a harbour is an exceptional measure. If proposed improvement works are of a productive nature, which they certainly should be, it is for the harbour authority in the first place to raise the necessary funds by borrowing, with the assistance of the local authorities or other local interests who stand to benefit from the improvements. State assistance must be reserved for essential and productive schemes, the full cost of which cannot be met locally.
Generation of electricity in the year ended 31st March, 1960 at 2,094 million units was 10.4 per cent. greater than in the previous year. In the year just ended the rate of increase in demand was about the same. Industrial consumption was 566 million units in the year ended 31st March, 1960, or an increase of 19 per cent. while domestic consumption was 703 million units or an increase of 5 per cent. The rate of expansion for industrial consumption at 19 per cent. in the year ended 31st March, 1960, was inflated somewhat by the incidence of one large new consumer (the oil refinery) but provisional information for the year ended 31st March, 1961, shows that industrial demand continued to be buoyant showing an increase of approximately 11.9 per cent. which is higher than the rate of increase in domestic demand at some 8.3 per cent.
I understand that the provisional results for the year ended 31st March, 1961, show a reasonable surplus and this is welcome news after deficiencies in the three preceding years. The improvement is due almost entirely to saving on fuel costs made possible by the phenomenal increase in output from hydroelectric stations in what was an abnormally wet year; the recent increases in rates did not significantly affect receipts in the year 1960/61.
An important consideration for the E.S.B. is that their operating results may fluctuate up and down by as much as £500,000 in any one year according to weather and the Board must therefore keep reserves to meet losses in bad years and to defer as long as possible unavoidable increases in rates. It may be expected therefore that the Board will use this surplus to help make good the inroads made on their reserves by the losses of the past three years.
When I spoke on this occasion last year, I mentioned that the new generation programme which had been approved was based on an estimated annual rate of increase in demand of 7 per cent. The annual rate of increase has now been running at about 10 per cent. for the past two years and it has, therefore, become necessary to accelerate the commissioning of new generating plant.
As Deputies are aware, the Board's charges, for both rural and urban supply had to be increased last year to correct a mounting deficit on the Board's overall revenue account. As the Board's accounts show, the loss on rural areas was reaching very substantial proportions. The Board is bound by statute to adjust its charges so that its revenue will be sufficient to meet expenditure and it was, therefore, imperative to increase charges. The increases were very moderate and were the minimum necessary to enable the Board to comply with their statutory obligation to keep the undertaking solvent.
Electricity here is a relatively very cheap commodity. Wages, salaries, construction costs, the cost of other fuels and the cost of food and agricultural produce have all increased far more than the cost of electricity which has increased by only 36 per cent. since before the war.
As far as rural areas are concerned the effect of the recent increase in charges is to add between 3d. and 4d. a week to the total bill for the typical farm consumer.
There is, however, an offset to this increase by the reduction from 80 to 60 in the number of units charged at the higher price. Any rural consumer using between 80 and 360 units per two months is, therefore, saving 1s. 2d. per period on the unit charges previously applicable. The charge has been made that rural consumers, when canvassed for supply, were assured that the fixed charge component of the Board's tariff would never be increased. No responsible official of the E.S.B. was ever authorised to give such an assurance and though I have gone exhaustively into the matter I have found no evidence that any such official ever did. In any case every contract for supply of current signed by every applicant makes it clear that the level of the whole may be raised at the Board's discretion.
The rural electrification scheme as originally planned will be completed in 1962 at a cost of between £31 and £32 million. At that stage, some 280,000 rural premises or 75 per cent. of the premises in the areas developed under the programme will have been connected. The remaining 25 per cent. remain unconnected mainly because they are so situated that the charge for making supply available to them after taking account of subsidy would be higher than the occupiers are prepared to pay. In addition, there are a number of isolated areas the connection of which would be so uneconomic as to be completely impossible under the present programme. The E.S.B., of course, go back over areas which have already been developed and people who refused to take supply initially have another opportunity of being connected at comparatively moderate rates of charge, though somewhat higher than if they had taken the supply when the areas were being developed initially. The whole position regarding the development of rural electrification on the completion of the present programme is one which is at present under examination.
Last year was not a very favourable one for Bord na Móna. Owing to the bad weather during the harvesting season, output of sod and milled peat at about 1½ million tons, was more than 25 per cent. below target and the Board expect therefore to show a loss for the year, after paying interest and depreciation, of the order of £100,000 approximately as compared with a profit of £35,000 in 1959/60. In order to avoid the adverse effects of a wet year in the future, arrangements have now been made to maintain a stock-pile of milled peat which will be fed in years of good production.
The new briquette factory at Derrin-lough was in operation for most of the year and brought the Board's total briquette output to about 120,000 tons. A second new briquette factory at Croghan with an output of 100,000 tons commenced testing just before Easter. This should meet the growing demand for this very new and attractive fuel, but the possibilities of further expansion must await the result of marketing experience. Exports of peat moss litter, and peat for ad-mixture with coal for coke production, as well as peat for mixing with foundry sand have been maintained. Deputies will have an early opportunity of considering the affairs of Bord na Móna in more detail as it will be necessary in the near future to introduce a Bill to authorise increased capital expenditure on turf development.
Coal imports were approximately the same in 1960 as in 1959 being 1,660,000 as against 1,600,000 tons. Great Britain, imports from which were almost 1,200,000 tons, recovered her position in the Irish market to the extent of about 300,000 tons, mainly at the expense of the United States, whose exports to this country fell from 462,000 tons to 184,000 tons. Imports from Germany—126,000 tons and Poland—134,000 tons were about the same as last year.
Home production of semi-bituminous coal in the Arigna Area has been running at about the same rate as last year when it was between 65,000 and 70,000 tons. Efforts to achieve greater utilisation of Arigna coal are proceeding and, under a technical assistance scheme, expert consultants have been appointed to carry out investigations directed to the possibilities of increased use of this coal for generation of electricity. Their report is expected in the current year. In this matter my Department is operating in conjunction with the Department of Industry and Commerce.
Anthracite production has shown a rise in 1960. At approximately 185,000 tons, it was 30,000 tons higher than the average for some years previous. About 10,000 tons were exported during the year. This compares with exports of approximately 1,000 tons in 1959. Certain grades of anthracite must be imported, of course, but imports in 1960 were about 55,000 tons or about 5,000 tons below the figure for the previous year.
The mines generally were able to dispose of their output although stocks at the end of 1960 were over 8,000 tons higher than at the end of 1959. Some dissatisfaction has been expressed with the sizing of certain grades of Irish anthracite and the mines and the merchants, under the stimulus of my Department, are co-operating in an endeavour to eliminate any cause for complaint.
I would like to refer to the scheme for promoting fuel efficiency in industry which is operated by my Department. Under the scheme grants are made available towards the cost of efficiency surveys of heating and power plant installations carried out by expert consultants. The maximum amount of this grant in any case is one third the cost of the survey.
Quite striking savings have been achieved by a number of firms who acted on the recommendations of consultants employed under the scheme. The response to the scheme has however been somewhat disappointing. I have recently arranged to have the scheme republished and I hope to see a greater response in the future.
I should also like to mention the very commendable efforts being made by commercial interests to popularise native fuels for domestic heating using high efficiency installations. It is gratifying to see such an enlightened awareness of the importance of fuel efficiency and it is greatly to be hoped that this attitude will become widespread.
At Shannon airport the new main runway which was brought into operation during 1960 is 10,000 feet in length and has ensured the use of the airport by fully loaded jet aircraft on flights to and from North America. Major extensions to the terminal building have been completed. These extensions provide improved and increased accommodation for passengers and public. Extension of the aircraft parking area is necessary to enable jet aircraft to be brought close to the terminal building and the work is proceeding. The new freight terminal building which is required to provide for the increasing terminal traffic during the winter will, it is hoped, be completed by October, 1961.
Whilst the number of aircraft landings at the airport—8,300 during 1960—showed a decrease of 11 per cent. on the 1959 figure the total number of passengers handled increased by 2 per cent. to 416,300. This represented one-fifth of all the air travellers on the North Atlantic route. The airport's total freight traffic at 18,163 metric tons was down by 11 per cent. as compared with 1959 but mail increased by 7 per cent. The drop in freight was due to decreases in transit traffic. The North Atlantic freight traffic through Shannon at 17,904 metric tons amounted, however, to one-third of all the air cargo over the North Atlantic. There was a substantial increase in terminal traffic. The number of terminal passengers—62,705 embarked and 58,132 disembarked—increased by 26 per cent. over 1959 while the amount of terminal freight—904 tons embarked and 901 tons disembarked—increased by 29 per cent. For the first five months of 1961 the terminal passenger traffic increased by 49 per cent. over the corresponding 1960 period.
The decline in passenger and freight transit traffic at the airport during the year has been counter-balanced to a great extent by increases in terminal traffic, i.e. in traffic originating and finishing there. An important element in the increasing terminal traffic at the airport is the development of the new industrial estate which is already providing about 70 tons of air freight a month. The availability of this new and increasing cargo should prove most attractive to airlines operating through the airport.
Eight foreign airlines are operating scheduled jet airplane services through Shannon airport. Present information indicates that with the introduction of jets on the transatlantic passenger services the airlines will schedule more passenger flights to land at Shannon this summer than they did in 1960. It is also encouraging to see that there is a recovery in the downward trend of landings by scheduled cargo aircraft at the airport. At this stage an estimate of total non-scheduled landings cannot be made but these are beginning to form quite a considerable proportion of the traffic at the airport—almost 40 per cent. in 1960. In the months of December 1960, and May, 1961 for example, a total of 103 and 147 jet planes landed at Shannon.
The increase in overall passenger traffic at the airport is reflected in an increase in the turnover of the sales and catering service. Turnover in the half-year ended 31st January, 1961, the latest period for which figures are available, amounted to £743,349, an increase of 7 per cent. on the turnover during the corresponding period of the previous year. This is a satisfactory development after the decline in trading which occurred in 1959 as a result of decreased activity at Shannon airport. This service necessarily depends on the level of traffic particularly passenger traffic at the airport.
The total capital expenditure on Shannon airport amounted to £4,615,000 on 31st March, 1961. For the financial year ended 31st March, 1961, total revenue at the airport was £728,472 and expenditure was £579,958. The operation of the airport in that year yielded a surplus of £148,514. This figure, however, makes no allowance for pension liability nor for depreciation and interest on capital which amounted to £456,000 for the year. Although air travel is now a normal feature of modern life airports all over Europe lose money. I am glad to say that the operating revenue at Shannon is considerably more than the operating cost while at Dublin both items are virtually even. But additional revenue is required to pay interest and depreciation. The receipts as a percentage of total costs are favourable when compared with other European airports.
In my view it should be the aim to operate all airports without any loss whatever. Unfortunately, there is a factor present here which does not apply to other types of transport in that an increase in landing charges to balance expenditure would distort the cost structure of fares charged by both our own and foreign air operators. Until the other countries cease imposing an unnecessary tax on national and municipal budgets in order to maintain their airports though the total may be small, I cannot enforce a "pay as you go" system at our airports.
Activities at Dublin airport continue to expand. During the year 1960, there were record totals of 15,200 aircraft landings, 818,800 passengers and 14,400 tons of freight handled, representing increases of 24 per cent., 27 per cent. and 39 per cent. respectively over the 1959 figures. Since June, 1960, when I last spoke on this matter, new sceduled services have commenced to operate into the airport. B.K.S. Air Transport Limited, in conjunction with Aer Lingus, operate a passenger service between Dublin and Belfast; Airlines (Jersey) Limited operate from Exeter to Dublin and Air Safaris Limited have recently introduced a service from Bournemouth.
Perhaps the major development during the year in this respect was the introduction in April, 1960, of the Liverpool-Dublin vehicle air ferry service, which carried over 1,500 cars and other small vehicles during the season. The service, which was suspended for the winter season, has been recently re-introduced. There is still a great untapped potential for carrying vehicles by air which can be of considerable benefit to the tourist industry. One essential to profitability is, however, that the service should be provided over the shortest possible route and I am hoping, therefore, for a favourable outcome to negotiations which I am having with the British Minister of Aviation on the provision of more suitable terminals on the British side. Other routes have already been approved and in the meantime the B.K.S. Liverpool-Dublin service will continue.
Extensions of the main runway and of a subsidiary runway to provide for the full economic use of the Aer Lingus Viscount 808 aircraft and to permit of the Limited jet operations which Aer Lingus are carrying out between Shannon and Dublin, have been completed. The new hangar for jet aircraft was put into use in December, 1960. The continuing increase of traffic at Dublin airport has necessitated additional aircraft parking space and the work is nearing completion. Traffic developments have also necessitated the provision of extra passenger and public accommodation and a new "finger" building or pier as an extension to the main terminal building is under construction. Progress has been delayed owing to the calling off of cement supplies during the industrial dispute. Nevertheless, it is expected to be available for the greater part of this year's busy season. Other projects include offices for administration and staff catering, flight victualling and cabin services and a new peat fuel boiler unit.
Owing to the steady and considerable increase in traffic at Dublin airport in recent years, it has become necessary to provide for further developments. A co-ordinated overall plan of development for the foreseeable future is at present being formulated.
The total capital expenditure on Dublin airport up to 31st March, 1961, amounted to £2,417,619. In the year ended 31st March, 1961, total revenue at the airport was £340,000 and expenditure amounted to £343,867. The operation of the airport, therefore, showed an operating deficit of £3,867 in that year. This figure makes no allowance for pension liability nor for depreciation and interest on capital which amounted to £229,000 for the year.
Construction of the new Cork airport, which commenced last year, is progressing steadily. Due to the 70 per cent. above normal rainfall from October 1960 and during the early part of this year progress was inevitably retarded but advantage has since been taken of the improved weather conditions to press ahead with the work as quickly as possible.
It was intended that flying operations would commence at the airport on 1st September, 1961, but owing to the industrial dispute affecting cement supplies, it will not now be possible to start operating until 16th October, 1961. Aer Lingus will operate scheduled services from Cork to Dublin, London, Bristol, Cardiff and Paris. Cambrian Airways, a British independent airline, will operate in conjunction with Aer Lingus on the services to London, Bristol and Cardiff. Services to Cork by other British independent airlines from Derby, Leeds, Manchester, Newcastle, Jersey and Exeter are also envisaged.
Total capital expenditure at the airport up to 31st March, 1961 amounted to £457,483.
In order to meet the future financial requirements of the air companies, a Bill has passed the Second Stage in the Dáil to increase the authorised share capital of Aer Rianta from £10 million to £13 million and to make provision for the issue by the Exchequer to Aer Rianta of repayable advances up to a maximum amount of £1 million. The total amount of issued share capital of Aer Rianta at present is £9,975,541 as against the figure of £10 million authorised under the Air Navigation and Transport (No. 2) Act, 1959.
I would like in referring to the progress of the air companies to mention that Aer Lingus has just completed a quarter of a century's operations. The directors and management of the air companies are to be congratulated on the successful expansion of activities in Britain, Europe and North America, based on sound economic principles and wise guidance since 1936. In the year ended 31st March, 1960, Aer Lingus made an operating surplus of £170,148 and in the six months ended 30th September, 1960, the operating surplus was £210,000. The financial accounts of the company for the year ended 31st March, 1961, are not yet available but I understand from the company that the airline will show a surplus of about £180,000 for that year. The company's total passenger traffic increased by 25 per cent. from 567,000 in the year ended 31st March, 1960, to 712,000 in the year ended 31st March, 1961. Freight traffic increased by 39 per cent. to 10,875,000 kilos (10,680 tons) and mail by 4 per cent. to 1,650,000 kilos (1,630 tons). Aer Lingus recently inaugurated a new service on the route Dublin-Jersey-Rennes. The company's frequencies of services on many of its existing routes are being increased. In the first five months of 1961, passenger traffic increased by 28 per cent. over the 1960 period.
The present operational strength of the Aer Lingus fleet consists of 7 sixty-five seater Viscount 808, 7 forty-seater Friendship F.27 and 5 thirty-two seater DC 3 aircraft. The passenger and freight traffic have increased in the first four months of this year by 24 per cent. and 44 per cent. respectively, over the 1960 period.
Aerlínte financial results for the twelve months ended 31st March, 1960, showed that there was an operating loss of £589,080 for the year, compared with an operating loss of £788,599 for the eleven months ended 31st March, 1959. The accounts for the six months ended 30th September, 1960, showed an operating surplus of £143,000 compared with a deficit of £286,000 in the same period of 1959. The provisional accounts for the year 1960/61 show a probable deficit of the order of £80,000.
The Aerlínte transatlantic service was inaugurated in April, 1958, with the leasing of Super Constellations from Seaboard and World Airlines Incorporated. This arrangement was terminated in December, 1960, when the company introduced its own Boeing Jet service, each plane carrying a maximum of 137 passengers. In the year ended 31st March, 1961, the company carried 35,176 passengers representing an increase of 51 per cent. on the previous year. Freight carried increased by 210 per cent. to 347 tons and mail by 9 per cent. to 48 tons. In the first five complete months of operation of the jets, January to May of this year, a passenger increase of 78 per cent.—11,645 as against 6,547—was recorded over the corresponding five months of the year 1960, when piston-engined aircraft were used.
As Deputies are probably aware, there has been much publicity in regard to the failure of the world's airlines to reach agreement on the levels of rates for transatlantic air freight. With the increased capacity now available and the introduction of new specially designed all-freight aircraft, the way is clear for a considerable reduction in the freight rates previously charged, particularly for the larger consignments. Agreement has now been reached on new rates and subject to the approval of Governments, they will come into effect on 1st October, 1961. Quite substantial reductions are to be introduced, especially for large consignments. The rates are at present being examined in my Department.
The Shannon Free Airport Development Co. Ltd., which was incorporated in 1959, continues its activities to promote the increased use of Shannon airport for passenger and freight traffic and for tourist, commercial and industrial purposes. The company works in close harmony in industrial matters with the Industrial Development Authority and, in tourist development matters, with Bord Fáilte Éireann.
The company's main sources of finance are provided under the authority of the Shannon Free Airport Development Company Limited Act, 1959. The Act authorises the Minister for Finance to subscribe for shares in the company up to an aggregate limit of £1,500,000. The Act also authorises the provision by way of Grant-in-Aid voted annually of sums which in the aggregate shall not exceed £500,000.
The capital is being used by the company for the construction of factory buildings and dwellings. The income from these activities is used to supplement the company's grant income. The non-repayable grants are used by the company in meeting its running expenses and providing financial assistance to new industrial undertakings at the airport. Capital issues to the company up to 31st March, 1961, amounted to £1,168,000 and payments by way of grant-in-aid to £367,500.
I am happy to say that encouraging progress has been made with the development of the industrial estate. Sixteen factory bays and a special factory for a piano manufacturer have been completed and on the basis of the continuation of the present promotional programme, the company envisages building in the current financial year a further ten factory bays and ancillary buildings and a scheme of one hundred dwellings for workers will also be undertaken. These dwellings are in addition to ten houses which have been constructed and a scheme of 137 flats which are at present under construction and which will be completed during the current year. Employment in May was 724 and it is estimated that by next March this figure will have reached about 1,250. The following are among the commodities being manufactured at the airport: radios, floor maintenance machinery, knitted jersey fabrics and fully fashioned garments, wire gauze, precision threaded fasteners and miniature capacitors and pianos.
Apart from the direct incentives to manufacture which are available at Shannon, such as factory premises for rent, taxation relief, grants for machinery and training, and relatively low labour costs, firms have been attracted by the availability of air transport from their factory doors to any part of the world. They are primarily export industries and do not intend to compete in the home market with other Irish manufacturers. Factories providing goods of high value in relation to volume, where speed of delivery is an important element, are in a position to deliver goods by air to any part of the world within a few days. Freight traffic has been constantly increasing and it is estimated that by 1965 over 5 million kilogrammes of air freight will be generated annually by the factory operations now established or planned at Shannon.
The company has leased factories as quickly as they can be built and, given the resources necessary, proposes to maintain a continuous programme of factory building up to the limit of demand. To enable the company to continue its work of attracting industries to the airport, legislation is before the House to provide additional finance when the present statutory limits have been reached.
I attach great importance to the introduction of modern methods in industry in Ireland and to the desirability of employing the best technical assistance to study problems of productivity, rationalisation and the use to the best advantage of labour. These problems have been the subject of wide international study and I am glad to say that the State-sponsored bodies under my control are fully alive to the need for employing modern methods of work study and organisation in their structures.
In all cases, industrial consultants have been engaged to examine existing systems and to recommend improvements. Officers of the companies have been sent abroad on courses in management to keep in touch with the latest trends. Each company has a special division, including work study teams specially trained for the purpose. These divisions are actively engaged in a constant review of existing procedures so as to ensure that the most up-to-date systems are adopted. Training courses for staff employed in the organisations are an important part of these arrangements. I may say that training courses for certain grades of staff are also becoming a feature of my own Department. The results have proved to be advantageous and are a clear proof of the profit to be gained from applying the latest techniques of work study to the problems that arise in every industry.
In the case of the transport and power industries forward planning is essential to expansion and economy. We must endeavour to be ready in good time to meet the growing demands of tourism and industry and not allow ourselves to be overtaken by events and committed willy-nilly to wasteful and inadequate temporary expedients. Both in relation to the activities of the Department and those of the State bodies for which I am responsible I have repeatedly stressed the importance of this forward-look approach. The development of our airports is kept under continual review so as to ensure that the ever-growing air traffic will not find us unprepared. The airlines watch traffic developments with the need in mind for timely replacement and additions for their fleets. SFAD Co. are pushing ahead with the development of the World's First Air Industrial Estate which involves planning over the next five years. C.I.E. have embarked on a comprehensive programme of improvements which look forward to bigger business created by better service. The need for long term planning and co-ordination by E.S.B. and Bord na Móna is obvious to all. Irish Shipping Ltd. has a long term programme for the expansion of the fleet to the approved target of 200,000 tons.
It is not enough to plan ahead. Both now and in the future the State-sponsored bodies must aim at the maximum of efficiency in their operation and to this end it is essential that advantage be taken of new modern techniques of management and production. I can tell the Dáil that in the introduction of new methods and techniques the State-sponsored bodies are in the front rank and will, so far as I am concerned, remain there. Only by those methods can they play their full rôle in the development of our economy. Increased productivity is also the only means by which a rising standard of remuneration for their staffs can be guaranteed.